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Payment of wages act

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Payment of wages act

  1. 1. Payment Of Wages Act By Manisha Vaghela 1
  2. 2. Evolution of concept of wages in India. In the earlier days, the imposition of fine was a fairly general practice in perennial factories and railways. There used to be other deductions from the wages paid to the workers, such as for medical treatment, education, interest on advances of the workers’ own wages, charities, and religious purposes selected by the employer. An important feature which added to the embarrassment of the workers at various places was paid. There was no uniformity in the payment of wages. Long comparatively the longer period in respect of which wages were intervals between wage payments invariability added to the in convenience of the workers.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 2
  3. 3. The Royal Commission on Labour in its report(1931) recommended, among other things, thatlegislation on deduction from wages and fines wasnecessary and desirable. The commission examined thedelays in the payment of wages and the practice ofdeductions from the wages of an employed person. Inthe light of its recommendations, the Government ofIndia introduced a Bill seeking to regular the delaysand deduction in the payment of wages to industrialand plantation labour. The Bill was passed in 1936 andthe Act came into force from 28th March, 1937. Inexercise of the powers conferred under the Act, theMaharashtra Government framed rules known as theMaharashtra Payment of Wages Rules,1936.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 3
  4. 4. The Act is in three parts.1. Part I deals with the regular and payment of wages by the employer.2. Part 2 specifies the heads under which deduction can be made from wages.3. Part 3 provides a machinery for enforcing specific claim arising out of delayed payments, deduction from wages, appeals, etc. It is a self – contained Act and provides its own machinery for the disposal of the claims. The Act contains 26 sections.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 4
  5. 5. INTRODUCTION was passed to The Payment of Wages Act, 1936 regulate the payment of wages to certain classes of persons employed in industry. It ensures payment of wages in a particular form and at regular intervals without unauthorized deductions. The Act extends to the whole of India [Sec. 1(2)]. It was extended to Jammu and Kashmir by the Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 5
  6. 6. The payment of wages to persons employed in any factory, to persons employed (otherwise than in a factory) upon any railway by a railway administration and to an industrial or other establishment. In various States the Act has been extended to shops and establishments also. The Act does not apply to persons whose wages exceed Rs. 1,600 per month. This limit was raised from Rs, 1,000 to Rs, 1.600 by the payment of Wages (Amendment) Act, 1982. It is provided that, in relation to the central government owned establishment, any notification will be issued only after the concurrence of central government.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 6
  7. 7. DEFINITION OF WAGES Wages :- ‘Wages’ means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment. Simply stated ‘wages’ means all remuneration due to any worker or employee if the terms of contract of employment are fulfilled. The definition of ‘wages’ includes the following:BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 7
  8. 8. (a) Any remuneration payable under any award or settlement between the parties or order of a court; (b) Any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period: (c) Any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); (d) Any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides forBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 8
  9. 9. the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made; (e) Any sum to which the person employed is entitled under any scheme framed under any law for the time being in force. The expression ‘wages’ does not include: (1) Any bonus (whether under a scheme of profit-sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 9
  10. 10. (2) The value of any house accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government: (3) Any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon: (4) Any travelling allowance or the value of any travelling concession:BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 10
  11. 11. (5) Any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment: (6) Any gratuity payable on the termination of employment in cases other than those specified in Clause (d) above.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 11
  12. 12. APPLICABILITY The Act is applicable to persons employed in any factory, railway, and to such other establishments to which the appropriate Government may, by notification, extend the provisions of the Act after giving three months’ notice to that effect. In the case of industrial establishments owned by the Central Government the notification can be issued with the concurrence of the Central Government.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 12
  13. 13. This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed Rs. 10,000 per month or such other higher sum, which on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 13
  14. 14. RULES FOR PAYMENT OF WAGES(SECS. 3 TO 6)  Responsibility for Payment of Wages (Sec.3)  Fixation of Wage-Periods (Sec.4)  Time of Payment of wages(Sec. 5)  Mode of payment of wages (Sec. 8)BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 14
  15. 15. 1) Responsibility for Payment of Wages (Sec.3) :- Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under the Payment of Wages Act. But in the case of persons employed (otherwise than by a contractor) in factories, industrial establishment or upon railway, the following persons shall also be responsible for the payment of wages: (a) In factories, the person named as the manager; (b) In industrial or other establishment, the person, if any, who is responsible to the employer for the supervision and control of the industrial or other establishment;BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 15
  16. 16. (c) Upon railways (otherwise than in factories), the person nominated by the railway administration in this behalf for the local area concerned (Sec. 3) The person so named, the person so responsible to the employer, or the person so nominated, as the case may be, shall also be responsible for such payment.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 16
  17. 17. 2) Fixation of Wage-Periods (Sec.4) :- Every person responsible for the payment of wages shall fix periods, known as wage-periods, in respect of which such wages shall be payable. A wage-period shall not exceed one month.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 17
  18. 18. 3) Time of Payment of wages(Sec. 5) :- (i) Wages to be paid before 7th or 10th day :- The wages of every person employed upon or in any railway, factory or industrial or other establishment upon or in which less than 1,000 persons are employed, shall be paid before the expiry of 7th day of the following wage-period. In case the number of workers exceeds 1,000, the wages shall be paid before the expiry of the 10th of the following wage-period. In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages due on completion of the final tonnage account of the ship or wagons, loaded or unloaded, as the case may be, shall be paid before the expiry of The second working day from the day on which his employment is terminated:BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 18
  19. 19. (ii) Wages in case of termination of employment :- Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the 2nd working day from the day on which his employment is terminated. Where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognised holiday, the wages earned by him shall be paid before the expiry .BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 19
  20. 20. of the 2nd day from the day on which his employment is so terminated. (iii) Exemption :- The State Government may, by general or special order, exempt the person responsible for the payment of wages from the operation of the above provisions in certain cases. (iv) Wages to be paid on a working day :- All payment of wages shall be made on a working day.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 20
  21. 21. 4) Mode of payment of wages (Sec. 8) :- section 6 provides that all wages shall be paid in currency coin or currency notes or in both: It is provided that the employer may, after obtaining the written authorization of employed person, pay him the wages either by cheque or by crediting the wages in his bank account. All wages shall be paid in current coins or currency notes or both. Payment of wages in kind is not permitted. The process of payment of wages in cash is very cumbersome where the number of workers is very large. It is also risky where the sum involved is large and the factory or industrial establishment is situated at a remote place.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 21
  22. 22.  In order to obviate these difficulties and save the worker from carrying cash on the pay day and mis-spending it, the employer may after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 22
  23. 23. DEDUCTIONS FROM WAGE (SECS. 7 TO 13) Deduction which may be made from wages (Sec. 7) :- The wages of an employed person shall be paid to him without deductions of any kind except those authorised by or under the Payment of Wages Act, 1936. the deductions from wages of an employed person may be of the following kinds only, namely; 1) Deductions for fines:- (a) No fine shall be imposed on any employed person save in respect of such acts or omission on his part as the employer, with the PreviousBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 23
  24. 24. approval of the State Government or of the prescribed authority, may have specified by a notice. (b) The notice specifying the acts and omissions for which fines may be imposed shall be exhibited in the prescribed manner on the premises (and in case of persons employed upon a railway, at the prescribed place or places) in which the employment is carried on. (c) No fine shall be imposed on an employed person until he has been given an opportunity of showing cause against the fine and has completed the age of 15 years.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 24
  25. 25. (d) The total amount of fine which may be imposed in one wage period on any employed person shall not exceed 3 per cent of the wages payable to him in respect of that wage-period. Such a fine shall not be recovered from the employed person by installments or after the expiry of 60 days from the day on which it was imposed [ Sec. 8(6) ] 2) Deductions for absence from duty:- Deduction may be made on account of the absence of an employed person from duty from the place or places where, by the terms of his employment, he is required to work. But the ratio between the amount of such deductions and theBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 25
  26. 26. wages payable shall not exceed the ratio between the period of absence and total period within such wage- period. It has however been held in K.S.R.T. Employees’ Assn. Vs General Manager, K.S.R.T., (1985) that in a strike by workers in a public utility service like transport service, if employees absent for a part of the day without notice, deduction of full day’s wages would not be unjustified or illegal.3) Deductions for Damage or Loss:- A deduction for damage to or loss of goods expressly entrusted to the employed person for custody or for loss of money for which he is required to accounts shall not exceed the amountBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 26
  27. 27. of the damage or loss caused to the employer by the neglect or default of the employed person. Same is the case as regards losses sustained by a railway administration on account of any rebates or refunds incorrectly granted by the employed person. 4) Deductions for services:- A deduction for house accommodation and such amenities and services supplied by the employer as have been authorised by the State Government shall not be made from the wages of an employed person, unless such services have been accepted by him as a term of employment or otherwise. Deductions inBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 27
  28. 28. respect of these services shall not exceed the value thereof. In case of deductions as regards services and amenities, the State Government may impose conditions. 5) Deductions for recovery of advances:- A deduction for recovery of an advance given to an employed person is subject to the following conditions viz., (i) recovery of an advance of money given before employment began shall be made from the first payment of wages in respect of complete wage-period, but no recovery can be made of such advance given for travelling expenses: (ii) recovery of an advance of money given after employmentBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 28
  29. 29. began shall be subject to such conditions as the State Government may impose: (iii) recovery of advances of wages not already earned shall be subject to any rules may by the State Government in this regard. The State Government may regulate the extent to which such advances may be given and the instalments by which they may be recovered. 6) Deductions for recovery of loans:- Deductions for loans granted for house-building or other purposes and the interest due in respect thereof approved by the State Government shall be subject to any rules made by the State Government regulating the extent to which such loans may beBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 29
  30. 30. granted and the rate of interest payable thereon. 7) Deductions for payments to co-operative societies and insurance Schemes:- These deductions shall include (a) deductions for payments to co-operative societies approved by the State Government or to a scheme of insurance maintained by the Indian Post Office; and (b) deductions made with the written authrisation of the person employed for the payment of any premium of his life insurance policy to the Life Insurance Corporation (LIC) of India or for the purchase of securities of the Government of India or of anyBY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 30
  31. 31. State Government or for being deposited in any Post Office Saving Bank in furtherance of any saving scheme of any such Government. 8) Other Deductions:- The following deductions shall also be permitted under the Act: (a) deductions of income-tax payable by the employed person. (b) deductions required to be made by order of a Court or other authority competent to make such order [Sec. 7 (2) (h)] (c) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 31
  32. 32. MAINTENANCE OF REGISTERS ANDRECORDS (SECTION-13 A) 1) Every employer shall maintain such registers and records giving such particulars of persons employed by him, the work performed by them, the wages paid to them, the deductions made from their wages, the receipts given by them and such other particulars and in such forms as may be prescribed. 2) every register and record required to be maintained under this section shall, for the purpose of this act, be preserved for a period of three years after the last entry made therein.BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 32
  34. 34. BY:MANISHA VAGHELA vaghela_manisha13@yahoo.com 34